Karen Bradley Stands Up To The Murdochs – But Has Ofcom Lost Its Bottle?

A Press Article by Steven Barnett, published by The Huffington Post

It’s rare to see any cabinet minister being warmly congratulated by her opposition shadow in the House of Commons. On matters involving Rupert Murdoch, it is virtually unprecedented. Governments of all shades in Britain have an almost unbroken record of abject surrender when it comes to tackling the sprawling expansion of Murdoch’s media empire.

And yet, in responding to Secretary of State Karen Bradley’s statement about the Murdochs’ proposed 100% takeover of Sky on Tuesday afternoon, her opposite number Tom Watson could not have been more effusive. “This is the first time that a minister in the current government has ever stood in the way of what the Murdochs want… So well done, and as they say in the Black Country: ‘she’s a good ‘un’”.

Bradley deserved the plaudits. She had not only reiterated her intention to refer the 21st Century Fox bid to the Competition and Markets Authority (CMA) for a full investigation on plurality grounds, but informed astonished MPs that she had changed her mind about a referral on another, entirely separate issue: whether Fox has a genuine commitment to broadcasting standards.

She will come to a final decision in the next few weeks, but as things stand Fox will now be facing lengthy inquiries by the CMA on two separate public interest grounds. It was a principled and courageous – as well as legally correct – decision, and earned a headline in the following day’s Guardian editorial that Bradley may or may not welcome: “Karen Bradley is standing up to the Murdochs.”

It was even more extraordinary in the face of a shockingly weak and pusillanimous series of recommendations by the media regulator Ofcom, who appeared to have bent over backwards to appease the Murdochs. In March this year, when Bradley first suggested her inclination to intervene in the bid, she made her concerns abundantly clear.

First, full ownership of Sky “may increase [the Murdoch family’s] ability to exercise influence over Sky News” in addition to its ownership of media enterprises across print, online and radio. Second, there were serious failures of corporate governance in respect of phone hacking at the News of the World, and Ofcom had stated in an earlier report that James Murdoch’s conduct “repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman”. Given that James Murdoch would have increased influence over Sky News after the merger, there was good reason for Ofcom to consider any implications for standards at Sky News.

Ofcom’s 146 page report, published by DCMS on 29 June, was bizarre in two respects. It concluded unequivocally, following a thorough 60 page analysis of the media market and media plurality, that the transaction did raise concerns about increased Murdoch influence. So far so good.

It then – for reasons that remain obscure – allowed 21st Century Fox to propose undertakings that would supposedly strengthen the editorial independence of Sky News, and concluded that these undertakings would “mitigate” the plurality concerns.

This was extraordinary for two reasons. First, the process of offering and then consulting on Undertakings in Lieu (UiLs) of referral should be at the discretion of the Secretary of State, not the regulator. Bradley made it clear in her statement to the Commons on the same day that she found this practice unusual.

Second, the proposals – which involved a separate Editorial Board for Sky News with a majority of independent members – were laughably weak and clearly open to manipulation and circumvention by an organisation with an established track record of systematically ignoring guarantees of editorial guarantees (e.g. the Times and Sunday Times in the UK, and more recently the Wall Street Journal in the US).

Having offered Fox an escape route on plurality, Ofcom then spent just 10 pages assessing the risk to broadcasting standards, and dismissed them. Yes, Fox compliance procedures were indeed inadequate but – prompted by Ofcom’s concerns – Fox had improved them: so, a mild smack on the wrist for having to be reminded of its obligations but nothing to prompt undue concern.

Karen Bradley invited representations on Ofcom’s report, and several campaign groups as well as a powerful cross-party coalition of MPs and peers argued vehemently that this was a wholly inadequate response to the history of corporate wrongdoing uncovered on both sides of the Atlantic. Senior journalists employed at the News of the World had been convicted of phone-hacking; public officials had been convicted of accepting bribes approved by Murdoch executives; a head of legal affairs was found to have lied to Parliament; million dollar settlements had been reached with victims of harassment at Fox News which included non-disclosure clauses to prevent the worst excesses being publicised.

More recently, Fox News was revealed to be intimately involved in concocting an entirely untrue story that a young Democratic Party activist in the US was killed because he was the source of compromising leaks from the Democratic Party during the presidential election. This ruthless exploitation of a young man’s death for political purposes – Fox News has admitted the story was untrue – has still not been explained away. Right-wing conspiracy theorists like Breitbart may be cavalier with their journalistic ethics, but does this sordid tale really give us confidence in the Murdochs’ corporate commitment to broadcasting standards?

When Bradley invited Ofcom to respond to these concerns, the regulator dug in its heels. Yes, it grudgingly agreed, there were “non-fanciful” concerns around Fox’s commitment to broadcasting standards. But it still insisted that she should “exercise her discretion” not to make a reference to the CMA. Specifically on the Seth Rich story, Ofcom felt unable to reach a view on the “wider issues” raised.

Ofcom was established 15 years ago to promote the interests of citizens. When the Murdochs made their bid for 100% of Sky in 2010-11, they met a robust and forensic regulator which worked hard to protect the public interest while a supine government worked behind the scenes to ease the merger through. It was only derailed by the Milly Dowler hacking revelations. Six years later, roles have been reversed. A supine regulator appears to have been captured by its most powerful stakeholder while a robust government looks determined to stand up for the public interest.

When then prime-minister David Cameron addressed the House of Commons in the immediate aftermath of the phone hacking scandal, he warned that “never again should we let a media group get too powerful.” Finally, we may have a government prepared to take that stand. But we should be profoundly worried that we also appear to have a regulator that has lost its bottle and in whom we can no longer have confidence to protect the public interest.

We must hope that the Competition and Markets Authority displays more independence, courage and respect for the facts in carrying out its enquiries.

Steven Barnett is Professor of Communications and a prominent writer and broadcaster who has been involved in policy analysis at the highest levels, both nationally and internationally, for the last 25 years. He has advised government ministers in the UK, has given evidence or served as an adviser on several parliamentary committees, has been called to give evidence to the European Parliament, and has been invited to speak at numerous national and international conferences.